Wednesday, 9 April 2014

Do the right thing Prime Minister, you can't go wrong

Rethink BR1M aid, say analysts

REDIRECT: Call to focus on welfare, social programmes

KUALA LUMPUR: THE government's 1Malaysia People's Aid (BR1M) cash aid programme to help low-income earners tide over the rising cost of living, should have an exit plan, said some analysts who also believe that it should be given in other forms.

An analyst, who did not want to be named, said the government should shift its focus on improving the services provided by the Welfare Department (JKMM) and other aid agencies rather than continuing with the cash aid.

"BR1M is not the way. We already have various ways to help the poor like through those distributed through JKMM," he told the New Straits Times yesterday.

"I think they (the government) should focus on improving the existing aid agencies, including zakat (tithes) and others, rather than adding another inefficient delivery channel. I would just abolish it and redirect attention and funds to improving the services of JKMM and have more spotlight on it."

The government's BR1M programme has become a hot topic of discussion among Malaysians since it was introduced in 2012, with negative views seeming to outweigh the positive, especially those coming from economists and analysts alike.

They argue that while the cash handout would not have a significant impact on households, it was also not a good mechanism in reducing poverty in the long term.

Universiti Malaya Centre for Poverty and Development Studies economist Associate Professor Dr Fatimah Kari said the cash handout did not provide a holistic social protection programme or provide incentives to get out of poverty.

"As an economist, I don't believe in BR1M. The government must announce an exit policy for BR1M. This can be done by providing comprehensive social programmes that give access to public health, education and jobs."

Similar sentiments were shared by other economists who urged the government to fine-tune the aid programme to ensure it meets the objective of cushioning the impact from the rising cost of living.

Socio-economic Development and Research Institute (SEDAR Institute) executive director Ivanpal S. Grewalin, in a recent report, was quoted as saying that it was only appropriate for the government to refine the method employed, given that the payout amount would increase over the next few years.

Ivanpal added that the aid delivery could be channelled in other forms, including utilities rebate vouchers or even food stamps.

The BR1M money first started as a one-off cash payment of RM500 to households with an income of less than RM3,000 a month.

This year, the government has increased the amount to RM650, which will benefit some seven million people compared with last year's 6.8 million, amounting to a disbursement of RM3.7 billion.

The government also announced its intention to distribute the cash hand-out twice this year to enable recipients to use it within a specified time and in a more careful manner compared with a one-off hand out.

In light of the government's intention to increase the BR1M amount from time to time, economists warned that expanding BR1M or any social safety net might not be sustainable in the long run.

"This may sound cliche, but the government should come out with a more effective mechanism to teach the rakyat to fish rather than feeding them with fish," said another analyst. - NST

Maybe some of the Prime Minister's able advisors and apple-polishers may not like to hear this but Tun Dr Mahathir Mohamad had made it very clear from day one that BR1M was a bad idea.

Do read Dr M's thoughts in Fuel Subsidy (Sept 2013) and the latest BR1M (March 2014). It was crystal clear and some of us are very sure that months before penning his thoughts Dr M had infact relayed his reservations or rather objections to the Prime Minister himself.

Of course when it comes from Dr Mahathir many a consultant and self appointed financial gurus would find it hard to digest the logic, simply due to their bloated ego and misplaced motivation.

Something must be very wrong somewhere if those rating agencies and financial analysts, whom the Government of the day is so fearful of, demand us to do away with fuel subsidy but at the same time silently agree to wasteful handouts like BR1M.

Where is the logic ?

The fact that BR1M is being finally debated openly by the mainstream media, I pray, is a strong indication that the Government has finally come to a realisation that such handouts can't possibly go on. BR1M is absolutely irresponsible and even the handsomely paid foreign consultants and their ilk can't deny this fact.

1 comment:

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